In the retail industry, pricing uniformly over a period of time is quite rare. For apparel and other short-life merchandise, customers respond to price drops and increases with higher and lower demand levels, respectively. Retailers use this consumer behavior and reduce product prices significantly towards the end of the season (also referred to as the clearance period) to sell their inventory completely. Retailers implement price drops in two formats: promotions and markdowns. Promotions are temporary price reductions which typically last a few weeks. Markdowns are permanent reductions in price. Promotions take place in the “regular” season for merchandise while markdowns occur during the “clearance” season. For example, the summer clothing collection may see promotions during the summer months, but if the inventory is high, then the summer collection is marked down towards the end of the summer season or at the beginning of the fall season. A notable feature of the clearance season is that once the price drops from the regular price, it does not rise again in that season.